June 12 (Bloomberg) -- Daimler AG, the third-biggest maker
of luxury vehicles, started sales and production of its first
mass-market electric car today, beating Bayerische Motoren Werke
AG with the introduction of an emission-free model.

Daimler began assembly of the Smart Fortwo electric drive
at a factory in Hambach, France, which is being upgraded for
more than 200 million euros ($251 million), the Stuttgart,
Germany-based company said in an emailed statement. Deliveries
will start later this year.

“We are making significant investments in the Hambach
site” for the electric-powered Smart and the next generation of
the city car, Annette Winkler, head of the Daimler’s small-car
brand, said in the statement. “I am convinced that this is
money extremely well invested.”

The electric version of the two-seater, which is built on
the same production line as counterparts with combustion
engines, has a range of 145 kilometers (90 miles) before needing
to be recharged.

Daimler offers the electric vehicles starting at 18,910
euros, with the battery rented separately for 65 euros a month.
Including the battery, the car is priced from 23,680 euros.

Munich-based BMW plans to introduce the electric-powered i3
next year. The model will be assembled in Leipzig, Germany, and
will mark the first large-scale battery-powered BMW.